SECURITIES AND EXCHANGE COMMISSION
----------------------------------
WASHINGTON, D.C. 20549
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SCHEDULE 14A
(RULE 14A-101)
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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
FILED BY REGISTRANT /X/
FILED BY PARTY OTHER THAN REGISTRANT / /
CHECK THE APPROPRIATE BOX:
/ / PRELIMINARY PROXY STATEMENT
/X/ DEFINITIVE PROXY STATEMENT
/ / DEFINITIVE ADDITIONAL MATERIALS
/ / SOLICITING MATERIAL PURSUANT TO RULE 14-11 (C) OR RULE 14A-12
CACHE INC.
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(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CACHE INC.
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(NAME OF PERSON(S) FILING PROXY STATEMENT
-----------------------
Payment of filing fee (Check appropriate box):
/ / $125 per Exchange Act Rules 0-11(c) (1) (ii), 14a-6(i) (1) or 14a-6(j) (2)
/ / $500 per each party to the controversy pursuant of Exchange Act Rule
14a-6(i) (3)
/ / Fee computed on table below per Exchange Act Rules 14a-6(i) (4) and 0-11
1. Title of each class of securities to which transaction applies:
2. Aggregate number of securities to which transaction apllies:
3. Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: (1)
4. Proposed maximum aggregate value of transaction:
(1) Set forth the amount on which the filing fee is calculated and
state how it was determined.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a) (2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, of the form or schedule and the date of filing.
<PAGE>
CACHE, INC.
1460 Broadway
New York, New York 10036
(212)575-3200
June 6, 1997
Dear Shareholder:
On behalf of the officers and directors of the Company,
you are cordially invited to attend the Cache, Inc. Annual
Meeting of Shareholders to be held at 10:00 a.m. on Wednesday,
July 16, 1997, at our headquarters, 1460 Broadway, New York, New
York, 15th Floor.
The Notice of Meeting and Proxy Statement on the
following pages cover the formal business of the meeting, which
includes proposals (i) to elect seven named nominees as directors and
(ii) to ratify the appointment of Arthur Andersen LLP,
certified public accountants, as Cache's auditors for the fiscal
year ending December 27, 1997.
The Board of Directors unanimously recommends that
shareholders vote in favor of each proposal. We strongly
encourage all shareholders to participate by voting their shares
by Proxy whether or not they plan to attend the meeting. Please
sign, date and mail the enclosed Proxy as soon as possible. If
you do attend the Annual Meeting, you may still vote in person.
Sincerely,
/s/ Andrew M. Saul
----------------------
Andrew M. Saul
Chairman of the Board
<PAGE>
CACHE, INC.
1460 Broadway
New York, New York 10036
_______________
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD JULY 16, 1997
_______________
TO THE SHAREHOLDERS:
The Annual Meeting of the Shareholders of Cache, Inc.
will be held on Wednesday, July 16, 1997 at 10:00 a.m. local
time, at our headquarters, 1460 Broadway, 15th Floor, New York,
New York 10036, for the purpose of considering and acting upon
the following proposals as set forth in the accompanying Proxy
Statement:
1. To elect seven named nominees as Directors of
the Company to serve until the next Annual Meeting of
Shareholders and until their successors are elected and
qualified.
2. To ratify the appointment of Arthur Andersen
LLP, certified public accountants, as auditors of the
Company for the fiscal year ending December 27, 1997.
3. To transact such other business as may
properly come before the Annual Meeting or any
adjournment thereof.
Only shareholders of record at the close of business on
May 30, 1997 are entitled to notice of and to vote at the meeting
or any adjournment thereof.
Whether or not you plan to attend the Annual Meeting,
please complete, date and sign the enclosed Proxy and return it
promptly to the Company in the return envelope enclosed for your
use, which requires no postage if mailed in the United States.
You may revoke your Proxy at any time before it is voted by
delivering to the Secretary of the Company a written notice of
revocation bearing a later date than the Proxy, by duly executing
a subsequent Proxy relating to the same shares of Common Stock
and delivering it to the Secretary of the Company, or by
attending and voting at the Annual Meeting.
You are cordially invited to attend.
By Order of the Board of Directors,
/s/ Victor J. Coster
------------------
VICTOR J. COSTER
Secretary
June 6, 1997
<PAGE>
CACHE, INC.
1460 Broadway
New York, New York 10036
_______________
PROXY STATEMENT
_______________
Accompanying this Proxy Statement is a Notice of Annual
Meeting of Shareholders and a form of Proxy for such meeting
solicited by the Board of Directors. The Board of Directors has
fixed the close of business on May 30, 1997 as the record date
for the determination of shareholders who are entitled to notice
of and to vote at the meeting or any adjournment thereof. The
holders of a majority of the outstanding shares of Common Stock
present in person, or represented by proxy, will constitute
a quorum at the meeting. This Proxy Statement and the enclosed
Proxy are being sent to the shareholders of the Company on or
about June 6, 1997.
Only shareholders of record at the close of business on
May 30, 1997 will be entitled to vote at the Annual Meeting. At
the close of business on such record date the Company had out-
standing 9,091,338 shares of Common Stock, par value $.01 per
share ("Common Stock"). No other class of voting security of the
Company is issued and outstanding. Each share of Common Stock
entitles the holder to one vote. Shareholders do not have
cumulative voting rights.
As of April 30, 1997, Messrs. Andrew and Joseph Saul
and certain Saul family trusts (sometimes collectively referred
to herein as the "Sauls") owned of record an aggregate of
5,862,629 shares of Common Stock, representing approximately
64.49% of the outstanding shares of Common Stock. See "Principal
Shareholders and Share Ownership by Management." The Sauls
intend to vote their Common Stock in favor of Proposals 1 and 2
which assures the approval of such proposals.
A Proxy that is properly submitted to the Company may
be properly revoked at any time before it is voted. Proxies may
be revoked by (i) delivering to the Secretary of the Company at
or before the Annual Meeting a written notice of revocation
bearing a later date than the Proxy, (ii) duly executing a
subsequent Proxy relating to the same shares of Common Stock and
delivering it to the Secretary of the Company at or before the
Annual Meeting, or (iii) attending the Annual Meeting and voting
in person (although attendance at the Annual Meeting will not in
and of itself constitute revocation of a Proxy). With respect to
Proposal 1, unless authority to vote for all Directors or any
individual Director is withheld, all the shares represented by
the Proxy will be voted for the election of Directors as set
forth in the Proxy Statement. Where a shareholder has specified
a vote for or against Proposal 2, such Proxy will be voted as
specified; if no direction is given, all the shares represented
by the Proxy will be voted in favor of the Proposal.
-1-
<PAGE>
Under SEC rules, boxes and a designated blank space are
provided on the proxy card for shareholders to mark if they wish
either to vote "for," "against" or "abstain" on one or more of
the proposals, or to withhold authority to vote for one or more
of the Company's nominees for director. Florida law requires the
presence of a quorum for the annual meeting, defined as a
majority of the votes entitled to be cast at the meeting. Votes
withheld from director nominees and abstentions will be counted
in determining whether a quorum has been reached. Broker-dealer
non-votes, which are defined in the third paragraph below, are
not counted for quorum purposes.
Assuming a quorum has been reached, a determination
must be made as to the results of the vote on each matter
submitted for shareholder approval: (1) the election of
directors; and (2) the ratification of auditors. Director
nominees must receive a plurality of the votes cast at the
meeting, which means that a vote withheld from a particular
nominee or nominees will not affect the outcome of the meeting.
In order to pass, the proposal to approve the ratification of the
Company's auditors must be approved by a majority of the votes
cast on such matter. Abstentions are not counted in determining
the number of votes cast in connection with the selection of
auditors.
Brokers who hold shares in street name have the
authority to vote on certain items when they have not received
instructions from beneficial owners. Brokers that do not receive
instructions are entitled to vote on the election of directors
and ratification of auditors. Under applicable law, a broker
non-vote will have no effect on the outcome of the election of
directors, or ratification of auditors.
The cost of soliciting Proxies will be paid by the
Company, which will reimburse brokerage firms, custodians,
nominees and fiduciaries for their expenses in forwarding proxy
material to the beneficial owners of the Company's stock.
THE COMPANY WILL PROVIDE, WITHOUT CHARGE, TO ANY
SHAREHOLDER UPON WRITTEN REQUEST A COPY OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K (EXCLUDING EXHIBITS BUT INCLUDING THE FINAN-
CIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES) FOR THE FISCAL
YEAR ENDED DECEMBER 28, 1996 AND/OR A COPY OF ANY OF THE
COMPANY'S QUARTERLY REPORTS ON FORM 10-Q OR CURRENT REPORTS ON
FORM 8-K. SUCH WRITTEN REQUESTS SHOULD BE DIRECTED TO: VICTOR
COSTER, SECRETARY, CACHE, INC., 1460 BROADWAY, NEW YORK, NEW YORK
10036.
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED AT THIS MEETING,
PLEASE SIGN, DATE AND MAIL THE PROXY PROMPTLY.
-2-
<PAGE>
ELECTION OF DIRECTORS
(Proposal 1)
The Board of Directors of the Company presently consists
of the following seven members: Messrs. Andrew M. Saul, Joseph E.
Saul, Roy C. Smith, Thomas E. Reinckens, Morton J. Schrader and Mark
E. Goldberg and Ms. Mae Soo Hoo, each of whom is a nominee for
re-election.
Unless authority to vote on the election of all
Directors or any individual Director is specifically withheld by ap-
propriate designation on the face of the Proxy, the persons named in
the accompanying Proxy will nominate as Directors, and vote such
Proxy for the election as Directors of, the persons named below. If
elected, such persons will serve as Directors until the next Annual
Meeting of Shareholders and until their successors are elected and
qualified.
Management does not contemplate that any of the nominees
for Director will be unable to serve, but if such a situation should
arise, the persons named in the accompanying Proxy will nominate and
vote for the election of such other person or persons as the Board
of Directors may recommend.
NOMINEES FOR DIRECTORS
Name Age Principal Occupation Since
- --------------------- ---- -------------------------------------- -----
Andrew M. Saul ......... 50 Chairman of the Board and 1986
Partner, Saul Partners (1)
Roy C. Smith ........... 58 Executive Vice-President of 1993
the Company (2)
Thomas E. Reinckens .... 43 Executive Vice-President, Chief 1993
Financial Officer of the Company (3)
Mae Soo Hoo ............ 42 Executive Vice President of 1995
the Company (4)
Joseph E. Saul ......... 77 Partner, Saul Partners (5) 1986
Morton J. Schrader ..... 65 Real Estate Broker, 1989
Newmark & Company Real Estate, Inc.(6)
Mark E. Goldberg ....... 40 Attorney in Private Practice (7) 1989
_________________________
(1) Mr. Saul, who became Chairman of the Board of Directors on
February 27, 1993, has been a partner of Saul Partners, an
investment partnership, since 1986. He is the son of Mr.
Joseph E. Saul.
(2) Mr. Smith has served as an Executive Vice President of the
Company since October 1990; from December 30, 1986 to October
1990, Mr. Smith was Vice President/Director of Store
Operations of the Company.
(3) Mr. Reinckens has served as Vice President and Chief
Financial Officer of the Company since November 30, 1989;
from 1987 to November 1989, Mr. Reinckens served as the
Company's Controller. He was appointed Executive Vice
President on September 13, 1995.
-3-
<PAGE>
(4) Ms. Soo Hoo has served as a Vice President of Merchandising
since February 1987. She was appointed to the Board of
Directors on September 13, 1995 and was also appointed
Executive Vice President/General Merchandise Manager on that
date.
(5) Mr. Saul has been a partner of Saul Partners, an investment
partnership, since 1986. He is the father of Mr. Andrew M.
Saul.
(6) Mr. Schrader was the President of Abe Schrader Corp., a
manufacturer of women's apparel, from 1968 through March
1989. Since 1989, he has been active as a real estate broker
for Newmark & Company Real Estate, Inc..
(7) Mr. Goldberg has been an attorney in private practice since
1985. Mr. Goldberg has provided legal assistance to the
Company since 1988 and is expected to continue to do so in
1997.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
During the year ended December 28, 1996 ("Fiscal 1996"),
the Board of Directors held four meetings. Each Director attended
all of such Board meetings. All non-employee Directors are
compensated for their services to the Company by participation in
the Company's group medical insurance program at an approximate cost
to the Company of $11,500 per individual per year.
The Board of Directors has an Audit Committee and a
Compensation and Plan Administration Committee, but has no standing
nominating committee. The Audit Committee of the Board of
Directors, established in July 1989, currently consists of Messrs.
Andrew Saul, Goldberg and Schrader. The Audit Committee met once in
Fiscal 1996. Each member of the Audit Committee attended such
committee meeting.
Duties of the Audit Committee include meeting with the
independent accountants and certain personnel of the Company to
discuss the planned scope of their examinations, the adequacy of
internal controls and financial reporting; reviewing the results of
the annual examination of the financial statements and periodic
internal audit examinations; reviewing the services and fees of the
Company's independent accountants; authorizing special
investigations and studies; and performing any other duties or
functions deemed appropriate by the Board of Directors.
The Compensation and Plan Administration Committee was
established in July 1991 as the Plan Administration Committee to
administer the Company's stock option plans. In May 1993 it was
renamed the Compensation and Plan Administration Committee and
delegated additional authority to determine the remuneration
arrangements for the three most senior executive officers and to
review and approve the remuneration arrangements for the Company's
other executive officers. It currently consists of Messrs. Andrew
M. Saul, Mark E. Goldberg and Morton J. Schrader. The Compensation
and Plan Administration Committee met once in Fiscal 1996 and each
member attended such committee meeting.
-4-
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth the compensation for the past
three years of the Chief Executive Officer and the Company's other three
most highly compensated executive officers (collectively, the "Named
Executive Officers").
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION COMPENSATION
------------ --------------
SECURITIES ALL OTHER
NAME AND FISCAL UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY($) OPTIONS (#) ($)(1)
- ------------------- -------- ----------- ------------- ------------
<S> <C> <C> <C> <C>
ANDREW M. SAUL 1996 -
(CHAIRMAN) 1995 -
1994 -
MAE SOO HOO 1996 255,852 - 1,786
(EXECUTIVE VICE 1995 178,077 50,000 541
PRESIDENT/DIRECTOR) 1994 154,065 103,750 522
ROY C. SMITH 1996 250,000 - 7,983
(EXECUTIVE VICE 1995 229,231 50,000 2,375
PRESIDENT/DIRECTOR) 1994 207,567 97,500 6,744
THOMAS E. REINCKENS 1996 210,000 - 2,260
(EXECUTIVE VICE PRESIDENT, 1995 189,231 50,000 823
CHIEF FINANCIAL 1994 169,308 75,000 776
OFFICER/DIRECTOR)
</TABLE>
(1) Included in the figures shown under this column for 1996 are the
following insurance premiums paid by the Company with respect to
term life insurance for the benefit of the executive officer and
long-term disability insurance: $2,591 and $5,392, respectively,
for Mr. Smith; $879 and $1,381, respectively, for Mr. Reinckens;
$565 and $1,221, respectively, for Ms. Soo Hoo.
Included in the figures shown under this column for 1995 are the
following insurance premiums paid by the Company with respect to
term life insurance for the benefit of the executive officer and
long-term disability insurance: $2,375 and $5,392, respectively,
for Mr. Smith; $823 and $1,381, respectively, for Mr. Reinckens
and $541 and $1,221, respectively, for Ms. Soo Hoo.
-5-
<PAGE>
Included in the figures shown under this column for 1994 are the
following insurance premiums paid by the Company with respect to
term life insurance for the benefit of the executive officer and
long-term disability insurance: $6,744 and $5,028, respectively,
for Mr. Smith; $776 and $1,276, respectively, for Mr. Reinckens
and $522 and $1,130, respectively, for Ms. Soo Hoo.
AGGREGATED FISCAL YEAR-END STOCK OPTION VALUES
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY STOCK OPTIONS
STOCK OPTIONS AT FY-END(#) AT FY-END ($) (1)
-------------------------- ---------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------- ----------- ------------- ----------- -------------
Roy C. Smith 147,500 $ 25,000
Thomas E. Reinckens 125,500 $ 25,000
Mae Soo Hoo 153,750 $ 25,000
_______________________
(1) In-the money Stock Options are those where the fair market
value of the underlying stock exceed the exercise price of
the Option. The amounts in this column represent the
difference between the exercise price of the Stock Options
and the closing price of the Company's Common Stock on
December 28, 1996 (the last day of trading for Fiscal 1996)
for all options held by each Named Executive Officer,
whether vested or unvested. The closing price of the
Company's Common Stock as reported on NASDAQ/NMS on December
31, 1996 was $3.75 per share.
-6-
<PAGE>
Employment Contracts and Change-of-Control Provisions
- -----------------------------------------------------
All of the options granted under the Company's 1994 Stock
Option Plan contain a provision under which the option will
become immediately exercisable (the "Accelerated Exercise") with
respect to all shares subject to it as follows: (i) except as
provided in clause (iii) below, immediately after the first date
on which less than 25% of the outstanding Common Stock in the
aggregate is beneficially owned (as defined in Rule 13d-3 under
the Securities Exchange Act of 1934) by Andrew M. Saul and Joseph
E. Saul, members of their immediate families and one or more
trusts established for the benefit of such individuals or
members, (ii) immediately prior to the sale of the Company
substantially as an entirety (whether by sale of stock, sale of
assets, merger, consolidation or otherwise), (iii) immediately
prior to the expiration of any tender offer or exchange offer for
shares of Common Stock of the Company, where: (x) all holders of
Common Stock are entitled to participate, and (y) the Sauls have
agreed (or have announced their intent) to sell such number of
their shares of Common Stock as will result in the Sauls
beneficially owning less than 25% of the outstanding shares of
Common Stock in the aggregate, and (iv) immediately, if 20% or
more of the directors elected by shareholders to the Board of
Directors are persons who were not nominated by management in the
most recent proxy statement of the Company. The Company is
required to give appropriate notice so as to permit an optionee
to take advantage of the foregoing provisions.
Compensation of Directors
- -------------------------
All non-employee Directors (Messrs. Andrew Saul, Joseph
Saul, Mark Goldberg and Morton Schrader) are compensated for
their services to the Company by participation in the Company's
group medical insurance program at an approximate cost to the
Company of $11,500 per individual per year.
Compensation Committee Interlocks and Insider Participation
- -----------------------------------------------------------
The Company's Compensation and Plan Administration Committee
consists of Messrs. Andrew M. Saul, Mark E. Goldberg and Morton
J. Schrader. Andrew M. Saul is also the Chairman of the Board of
the Company.
Mr. Goldberg is also an attorney in private practice. He
has been retained by the Company to provide legal services since
1988 and is expected to provide further legal services in 1997.
During the fiscal year ended December 28, 1996, Mr. Goldberg
received $54,830 from the Company for legal services rendered
during Fiscal 1996.
-7-
<PAGE>
COMPENSATION AND PLAN ADMINISTRATION COMMITTEE
REPORT ON EXECUTIVE COMPENSATION
General
- -------
Executive compensation consists generally of two components
- - base salary and option awards, and sometimes a third component
- - a discretionary bonus award. The Compensation and Plan
Administration Committee (the "Committee"), currently consisting
of Messrs. Andrew M. Saul, Mark E. Goldberg and Morton J.
Schrader, administers the Company's option plans pursuant to
which option awards are granted, determines the remuneration
arrangements for the three most senior executive officers and
reviews and approves the remuneration arrangements for the other
executive officers of the Company, which arrangements are
determined by the Chairman, in accordance with parameters set by
the Committee.
This report of the Committee of the Board of Directors
addresses the Company's compensation policies for Fiscal 1996
applicable to Cache's executives including the Named Executive
Officers.
The Committee's Report on Executive Compensation shall not
be deemed incorporated by reference by any general statement
incorporating by reference this proxy statement into any filing
under the Securities Act of 1933 or under the Securities Exchange
Act of 1934, except to the extent that the Company specifically
incorporates this Report on Executive Compensation by reference,
and shall not otherwise be deemed filed under such Acts.
Philosophy
- ----------
The Cache executive compensation program is designed to
attract and retain key executives. Its objectives are to reward
executives who contribute to the success of the Company through
individual and company performances. Specifically, compensation
includes a competitive base salary program and long-term stock
option awards. The Company will sometimes grant discretionary
bonuses to certain key executive officers with respect to prior
contributions as well as to serve as incentives to attract key
executives into the Company's employ.
Base Salary
- -----------
The Company believes a competitive base salary is necessary
to retain key management employees. Base salaries are determined
based upon a review of an individual's experience and
responsibilities, general industry practice and the competitive
environment for each position. Annual salary adjustments are
determined based upon an individual's performance, the Company's
performance, general industry practice and any new duties or
responsibilities assumed by the individual during the last year.
-8-
<PAGE>
Long-Term Incentives
- ---------------------
The Company believes that employee equity ownership is
highly motivating, provides a major incentive to employees in
building stockholder value, and serves to align the interests of
employees with stockholders. Options are based upon the relative
position and responsibilities of each executive officer,
historical and expected contributions of each officer to the
Company, and previous option grants to such executive officers.
Options are recommended with a goal to provide competitive equity
compensation for executive officers compared to executive
officers of similar rank in companies of the Company's industry,
geographic location and size.
Cache's stock option programs were designed by the Company
as a long-term incentive program for key executives. The stock
option programs have created an incentive for executives to
maximize shareholder return, by linking long-term compensation
with the valuation of the Company's Common Stock. The stock
option plans typically have included initial grants which have
vested from three to five years. Stock options granted under the
1994 Plan are required to have an exercise price at least equal
to the fair market value of the Company's common stock at the
date of grant. Among other factors considered by the Committee
in determining who qualified for stock option grants under the
1993 Plan and 1994 Plan and the amount of such grants were an
executive's business experience and his potential to contribute
to the future success of the Company.
In establishing incentive arrangements for 1996, the
Compensation and Plan Administration Committee, which
administered the 1993 Plan and administers the 1994 Plan, granted
no stock options in Fiscal 1996.
Other Compensation
- ------------------
The Company provides certain other benefits, such as health
insurance, to the executive officers that are generally available
to Company employees. In addition, the Company provides its
executives, including the Named Executive Officers, with term
life insurance and additional long-term disability insurance, at
the Company's cost.
The foregoing report has been furnished by the Compensation
and Plan Administration Committee consisting of Messrs. Andrew M.
Saul, Morton J. Schrader and Mark E. Goldberg.
-9-
<PAGE>
FIVE-YEAR PERFORMANCE COMPARISON
The following graph compares the yearly percentage change in
the Company's cumulative total shareholder return on Common Stock
with (i) the cumulative total return of the NASDAQ National
Market Index (which tracks the aggregate performance of equity
securities of companies traded on the NASDAQ National Market
System ("NASDAQ/NMS")) and (ii) the cumulative total return of
companies with the same four-digit standard industrial code (SIC)
as the Company (SIC Code 5621, titled "Women's Clothing Stores"),
over the period from December 28, 1991 to December 28, 1996. The
graph assumes an initial investment of $100 and reinvestment of
dividends. The graph is not necessarily indicative of future
price performance.
The graph shall not be deemed incorporated by reference by
any general statement incorporating by reference this Proxy
Statement into any filing under the Securities Act of 1933 or
under the Securities Exchange Act of 1934, except to the extent
that the Company specifically incorporates this information by
reference, and shall not otherwise be deemed filed under such
Acts.
<TABLE>
<CAPTION>
FISCAL YEAR ENDING
----------------------------------------------
COMPANY 1991 1992 1993 1994 1995 1996
- ---------------- ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
CACHE INC 100 97.14 68.57 60.00 38.57 41.43
INDUSTRY INDEX 100 106.39 77.94 74.98 60.42 71.56
BROAD MARKET 100 100.98 121.13 127.17 164.96 204.98
</TABLE>
-10-
<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 1990, Joseph Saul loaned the Company an aggregate of
$1,750,000. All such loans bore interest at the rate of 8 1/2%
per annum and matured on January 1, 1994. On December 14, 1993,
Joseph Saul agreed to replace the promissory note with a new
promissory note, having an interest rate of 7% per annum and a
maturity date of January 31, 1997 (the "First Note"), which note
was subordinated to the National Westminster Bank loan dated
December 15, 1993.
In 1991, Joseph Saul made a loan to the Company of an
additional $250,000, which loan bore interest at the rate of 7
1/2% per annum and was due on January 1, 1994. On December 14,
1993, Joseph Saul agreed to replace the promissory note with a
new promissory note (together with the First Note, the "Notes"),
which note was subordinated to the National Westminster Bank loan
dated December 15, 1993. This note bore interest at the rate of
7% per annum and had a maturity date of January 31, 1997.
In August 1996, the Company amended and restated its
revolving credit facility with Fleet Bank, N.A. (Successor in
interest to National Westminister Bank, New Jersey). In
connection therewith, Joseph Saul and the Company agreed that the
Company would not repay the Notes until such revolving credit
facility was terminated and all senior debt thereunder repaid,
except that the Company is permitted to repay an aggregate of
$1,000,000 on the Notes if the Company's tangible net worth (as
defined in the credit agreement) at December 31, 1997 is greater
than or equal to $25 million, and to repay an additional
$1,000,000 on the Notes if the Company's tangible net worth at
December 31, 1998 is greater than or equal to $29 million.
The interest rate on the Notes remains 7% per annum, payable
annually.
On December 16, 1994, the Company loaned $170,000 to Roy
Smith, Executive Vice President and a Director of the Company and
$80,000 to Thomas E. Reinckens, Vice President, Chief Financial
Officer and a Director of the Company, in each case for personal
reasons. All such loans are with full recourse to the executive,
payable on demand from the Company, secured by a pledge of shares
of the Company's Common Stock owned by such executive and bear
interest at a rate of 9% per annum.
See Also "Executive Compensation--Compensation Committee
Interlocks and Insider Participation."
As of April 30, 1997, the Sauls beneficially owned in the
aggregate 5,862,629 shares of the Company's outstanding Common
Stock, representing approximately 64.49% of the Company's
outstanding Common Stock. See "Principal Shareholders and Share
Ownership by Management."
-11-
<PAGE>
PRINCIPAL SHAREHOLDERS AND SHARE OWNERSHIP
BY MANAGEMENT
The following table sets forth certain information as to
the beneficial ownership of the Company's equity securities as of
April 30, 1997 by (i) each director or nominee of the Company,
(ii) each Named Executive Officer, (iii) each person who is known
to the Company to be the beneficial owner of more than 5% of the
Common Stock, and (iv) all executive officers and directors as a
group. Unless otherwise indicated, the beneficial ownership for
each person consists of the sole voting and sole investment power
with respect to all shares beneficially owned by him. For
purposes of this table, a person or group of persons is deemed to
have "beneficial ownership" of any shares as of a given date
which such person has the right to acquire within 60 days after
such date. For purposes of computing the percentage of outstand-
ing shares held by each person or group of persons named above on
a given date, any security which such person or persons has the
right to acquire within 60 days after such date is deemed to be
outstanding, but is not deemed to be outstanding for the purpose
of computing the percentage ownership of any other person.
Percentage of
Person and Address Number of shares Outstanding Shares
of Common Stock of Common Stock
- ------------------ ----------------- ------------------
Andrew M. Saul
630 Fifth Avenue
New York, NY 10111 (1) 5,862,629 64.49%
Mark E. Goldberg
225 Broadway
New York, NY 10067 4,225 Less than 1%
Joseph E. Saul
630 Fifth Avenue
New York, NY 10111 (2) 5,862,629 64.49%
Morton J. Schrader
733 Park Avenue
New York, NY 10021 5,000 Less than 1%
Trust f/b/o
Jennifer B. Saul
pursuant to Trust
Agreement dated
March 28, 1995
630 Fifth Avenue
New York, NY 10111 (3) 756,314 8.32%
Trust f/b/o
Kimberly E. Saul
pursuant to Trust
Agreement dated
March 28, 1995
630 Fifth Avenue
New York, NY 10111 (3) 756,314 8.32%
-12-
<PAGE>
Percentage of
Person and Address Number of shares Outstanding Shares
of Common Stock of Common Stock
- ----------------------- ---------------- -------------------
Jane Saul Berkey
Cache, Inc.
1460 Broadway
New York, NY 10036 (4) 494,046 5.43%
Roy C. Smith
Cache, Inc.
1460 Broadway
New York, NY 10036 85,000 Less than 1%
Thomas E. Reinckens
Cache, Inc.
1460 Broadway
New York, NY 10036 41,500 Less than 1%
Mae Soo Hoo
Cache, Inc.
1460 Broadway
New York, NY 10036 41,731 Less than 1%
All Current
Executive Officers
and Directors as a
Group (seven persons) 6,040,085 66.44%
_______________________
(1) Represents shares beneficially owned by the group
consisting of Messrs. Andrew Saul, Joseph Saul and the
Trusts (defined below) according to a Schedule 13D, as
amended, filed by the group with the Securities and
Exchange Commission. Mr. Andrew Saul may be deemed to
beneficially own 2,891,218 shares of Common Stock,
representing approximately 31.80% of the outstanding
shares of Common Stock, consisting of (i) 2,585,158
shares of Common Stock owned by Andrew M. Saul, (ii)
140,530 shares of Common Stock owned by Trust f/b/o
Kimberly E. Saul, pursuant to Trust Agreement dated
December 18, 1984, of which Andrew Saul is a trustee,
(iii) 140,530 shares of Common Stock owned by Trust f/b/o
Jennifer B. Saul, pursuant to Trust Agreement dated
December 18, 1984, of which Andrew Saul is a trustee, and
(iv) 25,000 shares of Common Stock owned by the Andrew
and Denise Saul Foundation, of which Andrew Saul, his
wife Denise and Sidney Silberman comprise the Board of
Directors and Andrew Saul is its President. The trusts
described in clauses (ii) and (iii) of this footnote (1)
and in clauses (ii) and (iii) of footnote (2) are
collectively referred to herein as the "Trusts." Joseph
E. Saul and Andrew M. Saul (who are father and son) and
the trusts have an informal arrangement under which they
have agreed to vote and dispose of their shares together.
Andrew Saul disclaims beneficial ownership of the shares
not directly owned by him.
-13-
<PAGE>
(2) Represents shares beneficially owned by the group
consisting of Messrs. Andrew Saul, Joseph Saul and the
Trusts, according to a Schedule 13D, as amended, filed by
the group with the Securities and Exchange Commission.
Mr. Joseph Saul may be deemed to beneficially own
2,971,411 shares of Common Stock, representing
approximately 32.68% of the outstanding shares of Common
Stock, consisting of (i) 1,351,283 shares of Common Stock
owned by Joseph E. Saul, (of which 392,000 shares are
held directly by his wife, Norma Saul) (ii) 756,314
shares of Common Stock owned by Trust f/b/o Jennifer B.
Saul, pursuant to Trust Agreement dated March 28, 1985,
of which Joseph Saul is a trustee, (iii) 756,314 shares
of Common Stock owned by Trust f/b/o Kimberly E. Saul,
pursuant to Trust Agreement dated March 28, 1985, of
which Joseph Saul is a trustee, and (iv) 107,500 shares
of Common Stock owned by the Joseph E. and Norma G. Saul
Foundation, of which Joseph Saul, his wife Norma, and
Sidney Silberman comprise the Board of Directors and
Joseph Saul is its President. Joseph Saul and Andrew
Saul (who are father and son) and the Trusts have an
informal arrangement under which they have agreed to vote
and dispose of their shares together. Joseph Saul
disclaims beneficial ownership of the shares not directly
owned by him.
(3) The trust f/b/o Jennifer B. Saul and the Trust f/b/o
Kimberly E. Saul each own 756,314 shares of Common Stock,
according to a Schedule 13D, as amended, filed with the
Securities and Exchange Commission. Joseph E. Saul, his
wife Norma Saul and Sidney J. Silberman, Esq., are
trustees of such trusts.
(4) Represents shares beneficially owned by Jane Saul Berkey
according to a Schedule 13D, as amended, filed by Ms.
Berkey with the Securities and Exchange Commission. Jane
Saul Berkey is the daughter of Mr. Joseph Saul and the
sister of Mr. Andrew Saul.
-14-
<PAGE>
RATIFICATION OF THE APPOINTMENT OF
ARTHUR ANDERSEN & CO. AS AUDITORS
(Proposal 2)
Board of Directors has appointed the firm of Arthur Andersen
LLP to examine the financial statements of the Company for the
year ending December 27, 1997, subject to ratification by
shareholders. Arthur Andersen LLP was employed by the Company as
its independent auditors for Fiscal 1996. Shareholders are asked
to ratify the action of the Board of Directors in making such
appointment.
Representatives of Arthur Andersen LLP will attend the
Annual Meeting. They also will have the opportunity to make a
statement if they desire to do so and will be available to
respond to appropriate questions.
The Board of Directors recommends a vote for ratification.
The affirmative vote of a majority of the votes cast with respect
to this proposal is required for the ratification of the
appointment of auditors. The Sauls intend to vote shares of
Common Stock they own in favor of Proposal 2 and the vote of such
shares will be sufficient to obtain the required shareholder
approval.
OTHER BUSINESS
Management knows of no business to be brought before the
meeting other than Proposals 1 and 2 in the Notice of Annual
Meeting. If any other proposals come before the meeting, it is
intended that the shares represented by Proxies shall be voted in
accordance with the judgment of the person or persons exercising
the authority conferred by the Proxies.
Financial statements of the Company, the Company's certified
public accountants' report thereon and management's discussion
and analysis of the Company's financial condition and results of
operations are contained in the Company's 1996 Annual Report to
Shareholders, a copy of which has been sent to each shareholder
of record along with a copy of this Proxy Statement. The Annual
Report is not to be regarded as proxy soliciting material or a
communication by means of which any solicitation is to be made.
-15-
<PAGE>
SHAREHOLDER PROPOSALS
Proposals by shareholders intended to be presented at the
next Annual Meeting (to be held in 1998) must be received by the
Company on or before February 6, 1998 in order to be included in
the Proxy Statement and Proxy for that meeting. The mailing
address of the Company for submission of any such proposal is
given on the first page of the Proxy Statement.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY.
THEREFORE, SHAREHOLDERS ARE REQUESTED TO SIGN, DATE AND RETURN
THE PROXY CARD AS SOON AS POSSIBLE, WHETHER OR NOT THEY EXPECT TO
ATTEND THE 1997 ANNUAL MEETING IN PERSON.
By Order of the Board of Directors,
/s/ Victor J. Coster
-------------------
VICTOR J. COSTER
Secretary
-16-
<PAGE>
PROXY PROXY
CACHE INC.
ANNUAL MEETING OF SHARE HOLDERS JULY 16, 1997
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby apppoints Andrew M. Saul and Thomas E. Reinckens,
and each of them, with full power of substitution, Proxies of the undersigned
to vote all shares of Common Stock of Cache, Inc. (the "Company") which the
undersigned is entitled to vote at the Annual Meeting of Shareholders to be
held on July 16, 1997, and all adjournments thereof, with all the powers the
undersigned would possess if personally present, and partically, without
limiting the generality of the foregoing, to vote and act as follows:
1. Election of seven directors of the Company.
/ / FOR all nominees listed below / / WITHHOLD AUTHORITY to
(except as marked to the vote for all nominees
contrary below) listed below
Andrew M. Saul, Joseph E. Saul, Mae Soo Hoo, Roy C. Smith,
Thomas E. Reinckens, Mark E. Goldberg, Morton J. Schrader.
(INSTRUCTION: To withhold authority to vote for any individual nominee,
write the nominee's name in the space below.)
----------------------------------------------------------------------------
2. Ratification of the appointment of Arthur Andersen LLP as the Company's
independent auditors for the fiscal year ending December 27, 1997.
/ / FOR / / AGAINST / / ABSTAIN
CONTINUED AND TO BE SIGNED ON REVERSE
<PAGE>
3. In their discretion, upon such other matters as may properly come before
the meeting.
THIS PROXY WILL BE VOTED AS SPECIFIED ABOVE. IF NO SPECIFICATION IS MADE,
THIS PROXY WILL BE VOTED "FOR" THE ELECTION OF EACH DIRECTOR NAMED HEREIN
AND "FOR" ITEM 2.
DATED______________________, 1997
(Please fill in date)
NOTE: Please sign as name appears.
Joint owners should each sign
--------------------------------
Signature of Shareholder
--------------------------------
Signature of Shareholder
When signing as Attorney, Executor,
Administrator, Trustee or Guardian,
please give full title as such. If
signer is a corporation, please
sign with the full corporation name
by duly authorized officer or
officers.
<PAGE>
